China car sales analysis August 2017

The Chinese car market grows for the third consecutive month in August 2017, with a 6,5% increase to 1,87 million sales. That brings the year-to-date total to almost 14,5 million sales, an increase of 3,7% on the same period in 2016. Looking at the final four months of last year, they were exceptionally good in terms of sales volume due to the pending reduction of the tax cut on small vehicles (engines of less than 1,6 liters). The tax, which was temporarily halved to 5%, increased to 7,5% on Jan. 1st 2017 and will return to its normal rate of 10% on Jan. 1st 2018. This may give the Chinese car market another boost in the final few months of this year, but will it be enough to keep the market from decreasing for the first time in a couple of decades? The year-end rally in 2016 pulled forward a lot of sales, which translated in a slow start of 2017 and that may be difficult to make up in the final few months of the year. Back to August: crossovers and SUVs continue their boom with an 18% increase to 760.700 sales, but for only the second time this year, after February, sedan sales also improved, up 4% to 954.800 units. The MPV segment remains weak with a decline of 19% to 155.200 sales. Within those sales figures, electric cars and PHEVs also showed a impressive improvement of 76% in August, to almost 68.000 sales. EVs were responsible for most of that growth, as sales increased 96% to 56.000, compared to a 22% increase for PHEVs, to 12.000. These figures add up to 260.000 EV and 59.000 PHEV sales in China so far this year, an increase of 30% on the first 8 months of 2016 and 2,2% of the overall market. The Beijing government has set a target of 6,7% in 2020 and as much as 20% by 2025, helped by a carbon credit scheme that will be imposed in 2018.

The Seasonally Adjusted Annualized selling Rate in August stood at 24,9 million, the highest since last January and up almost a million on July. The share of domestic automakers in August was 38,5%, the lowest figure in the past 13 months and down from 39,15% in August 2016. However, it’s worth noting that the share of domestic brands in the crossover segment is an impressive 56%. Despite their success in this hot segment, sales of domestic brand vehicles across all segments trailed the market growth at +4,7%, though still beat the US brands at +2,8% and the South-Korean brands at -27,2%, their lowest rate of decline since last February. With European brands up 8,7%, most of the growth in China came from Japanese brands at +25,3%.

For the fifth month in a row, the Wuling Hongguang does not top the charts, and for the second time ever, after last June, the Buick Excelle GT is the Chinese car sales leader. In fact, the Hongguang is out of the top-3 for the first time since its classification as a passenger car in 2013. With sales slumping by almost a quarter, it is down to 5th place, behind 3 sedans and one crossover, with the Nissan Sylphy at #4 for the 5th time this year. The Haval H6 remains China’s best selling crossover but is down for the sixth consecutive month, but at least now the Haval brand has been able to offset that with the lauch of the M6 this month. Challenging the H6 for its title is the Baojun 510, which is virtually stable on its record sales month of July, but still down from 4th to 6th, ahead of the Volkswagen Tiguan, helped by the addition of the L version, and the GAC Trumpchi GS4, which continues to improve. Two new crossovers also continue to perform well: the Geely Boyue has sold consistently between 20.000 and 22.000 monthly units since last December and the Roewe RX5 is back above 20.000 sales for the 3rd time this year and the 6th time ever. Baojun’s small hatchback 310, now also available as a station wagon, improves its monthly record at just over 18.700 sales.

Other notable performers in the top-100 are the Changan CS55, up to #43 in only its third month of deliveries, the Mercedes-Benz E-Class L, above 10.000 sales for the second time this year and the third time ever, the Honda Avancier, stable at above 8.000 sales for the second month in a row and therefore back above the Volkswagen Teramont, and the Soueast DX3 with a new monthly record at 8.565 sales. Among recent launches, we’ve already mentioned the impressive surge of the CS55, but also look at the 77th place for the Changan Oushang A800 in also its third month of sales, the Wey VV7 at #85 with almost 7.200 sales, which means the Wey brand almost offsets the loss of the Haval brand. In its third month of sales, the Zotye T700 jumps into the top-100 to become the brand’s best seller, but the Chevrolet Equinox seems to have had a very short breath as it is down month-over-month for the third straight month.

European brands

For the fourth consecutive month, Volkswagen increases its sales, and the brand even outperforms the market for the third consecutive month at +10,4%. The Tiguan (#7, +49%), Magotan (#22, +52%) and Lamando (#33, +52%) all show impressive growth figures, and the addition of the Teramont (#81) also helps, obviously. In contrast, Skoda is down for the fifth time in the last six months despite the addition of the Kodiaq crossover (#126). After 7 straight months of losses, sister brand Audi is up for the second consecutive month as the dispute with its dealers has been solved. Audi sales are still down year-to-date, but at least the brand regained its position as China’s top selling luxury brand, even when including imports. Audi’s total sales were up 10% to 54.200, ahead of Mercedes-Benz at +25% to 50.500 (including Smart) and BMW at +12% to 47.400 sales (including Mini and Rolls-Royce). Looking at sales of locally produced models for these brands, the ranking remains the same and even the growth rates are quite similar. Volvo comes from far behind but lodges impressive increases at +42% to 7.800 sales of its 3 locally produced models, with the S90 (#195) improving yet again, for the first time above 2.000 sales. That means it beats its rival Jaguar XFL (#206) for the third straight month, even though the latter also breaks its monthly record. Land Rover is above 5.000 sales for the fifth time this year.

Looking at the French brands, Peugeot is starting to see some light at the end of the tunnel, with its smallest decline this year at -8,9%, the first time in single digits in 2017. Its 2 new crossovers obviously help, but even the 308 sedan (#140, +32,5%) shows an increase again. Sister brand Citroën also enjoys its least bad performance of the year, but at -37,3% that’s still not worthy of any celebrations. All of the brand’s nameplates are down, except for the recently facelifted C5 (#247, +318,8%) and the newly launched C6 (#327). The C5 Aircross will hopefully restore some confidence in the brand when it arrives in showrooms this month. Renault is back above 5.000 sales and is on track to hit 70.000 sales of its locally produced crossovers this year. It will add an imported Captur and Espace to its line-up in coming months, but those will have a limited impact on the brand’s total volume.

American brands

Buick sales are stable in August, as the Excelle GT sedan (#1, +24%) and GL8 MPV (#31, 94,5%) offset losses for the Envision crossover (#26, -29,6%) and the discontinued Excelle. Cadillac has its best volume since January and is above 15.000 sales for only the third time ever. Especially the ATS-L (#111, +122,4%) remains popular, selling 5 times as well as it does in its home market US and not far behind the brand’s best seller in China, the XT5 crossover (#107, +45,7%). Sister brand Chevrolet appears to have lost some of its momentum from recent months with its lowest growth rate since March at +7%. The Sail (#106, -53,8%) is the biggest culprit as the model is about to be facelifted. Rival Ford keeps performing inconsistently, after two months of increases it suffered a 28,7% loss in July, followed by a modest 5,2% loss in August. The Focus was down harshly last month to less than 9.000 sales but is back up again to over 24.000 (#35, -26,9%), and the same goes for the Ecosport (#132, +9%), while now the Kuga (#74, -9,3%) and Edge (#75, -18,7%) are down. Its luxury brand Lincoln continues to improve with solid figures, comfortably breaking the 5.000 monthly sales mark for the first time ever, and doing that on import only sales. After an uncharacteristic loss in July, Jeep is back up again in August, though by “just” 10,7%.

Japanese brands

As mentioned above, and as seen for most of this year, the Japanese brands are booming in China. Part of the explanation for this rise is a return to form after relatively weak sales since 2012 when the dispute between China and Japan over a number of islands in the South-China Sea caused public backlash against Japanese companies and brands. However, Japanese brands had been trailing the market growth in China since 2009 and are finally catching up. Another reason for their exceptional form this year is that they’re benefiting from customers switching away from South-Korean brands as this country now has a dispute with China which causes their brands to suffer huge sales declines. And a third explanation is most clearly visible at Honda, which has been getting its products for the Chinese market right in recent times and is rewarded for it with double digit growth figures for each month so far this year. In August, Honda sells its highest monthly volume of 2017 at over 128.000 sales and shows its highest growth rate since February at +43.3%. The largest contributors to this success are the new generation Civic (#29, +66,3%), the small crossovers XR-V (#21, +85%) and Vezel (#30, +13,3%), as well as the newly launched large SUVs UR-V (#122) and Avancier (#73). As a result, Honda remains in the #2 spot of the brands ranking for the 5th consecutive month. Toyota and Nissan are in 5th and 6th place, and both also clearly outperform the market growth at +17,7% and +18,7% respectively. Toyota benefits from growth of its compact cars Corolla (#8, +24,2%) and Levin (#40, +14,2%, hybrid: #161, +87%), but mostly from the epxansion of its small-car range to 4 models, which has almost doubled sales of the Vios (sedan: #90, -2,5%, FS: #151, new) and Yaris (sedan: #142, new, hatchback: #125, +69,1%) nameplates. At Nissan, the Qashqai crossover (#28, +45,8% and Sylphy sedan (#4, +22,8%) remain hot, while the Kicks small crossover (#202) sees its sales halve on its introduction month.

Among the smaller Japanese brands, Mazda shows its first year-over-year loss in 16 months after 12 months of double digit growth. Main culprit for this sudden downfall is the CX-5 (#240, -65,7%) which takes a hit due to the changeover to the new generation. Mazda’s other 3 models improve on last year. Mitsubishi continues to grow, but as the Outlander (#87) celebrates its first anniversary of local production, the brand might not be able to continue its winning streak much longer, also considering the ASX (#295, -57,9%) is running out of steam. Suzuki extends its double digit losing streak to 5 months (and 29 months of decline in the last 31 month), but at “just” -10,3% it’s the smallest loss this year. The facelifted S-Cross (#242, +70,8%) is slowly picking up some pace, but most other models stay in a downward spiral.

South-Korean brands

Speaking of downward spirals, Hyundai-Kia are slowly crawling out of theirs, but are still losing a substantial sales volume in China. Hyundai sales are down 22,8% in August, its best performance since last February when the crisis between China and South-Korea broke. Its year-to-date sales are down 38,5% which means the brand sold a quarter of a million fewer cars in the past 8 months compared to the same period last year. Its crossovers are hit the hardest, even though Hyundai was already overdependent on sedans and has been launching even more (cheap) sedans at a time when Chinese consumers are switching to either crossovers or to cars with more modern and upscale technology (downsized engines, large touch screens with smartphone connectivity etc.). Even domestic Chinese brands offer such technology in some of their cheapest offerings and are stealing back customers from Hyundai which still thinks a low price is the only way to sell cars in China. The brand needs change asap or risks losing out in the world’s largest market altogether. Then again, the troubles are even worse at sister brand Kia, which is down by 35,8% in August and has lost more than half of its volume so far this year (-192.000 sales). All but one of its nameplates are down in August, just the K5 (#212, +6,9%) manages to improve.

Chinese brands

There’s no stopping the domestic success story of the year: Geely. The brand has successfully launched a new range of models with modern design and continues to update older models with that same new design. It has helped the Geely to surpass Changan as the best selling domestic brand just a few months ago, and it continues to outperform. Meanwhile, Changan is behind Baojun for the second consecutive month as Baojun too has clearly outperformed the market thanks to a number of hot selling new models with modern design and impressive value-for-money. Changan sales are down despite two successful launches in recent months, as mentioned above, with most of its other models in terrible shape. The brand desperately needs to clean up its line-up, as it has 9 nameplates that sold fewer than 2.000 units in August. Great Wall‘s Haval brand extends its losing streak to 5 months, despite the addition of the new M6 (#164) which compensates for the loss in H6 (#2, -4,8%) deliveries. Biggest losers in its line-up are the H1 (#375, -94,3%) and H7 (#203, -55,3%), while the H5 (#324), H8 (#350) and H9 (#277) have never really been able to strike a chord. Basically the brand, despite a line-up of now 8 crossovers, depends on the H2 (#59, -18,5%) and H6 for 87% of its sales. At least its more upscale sister brand Wey appears to enjoy a successful launch as the VV7 (#85) makes up for the losses at Haval.

Similar to Geely and Baojun, GAC Trumpchi has been very active in expanding its line-up with great looking cars and modern technology for a reasonable price. It extends its winning streak to 28 months of double digit or triple digit growth and has never had a single month of decline since its launch in 2011. The brand has added a fourth crossover to its line-up with the GS3 (#291), which is all but guaranteed to become another success for GAC and will keep the brand growing. On the other end of the scale, Wuling and BAIC are in terrible shape. Wuling is dependent on a single model, the Hongguang MPV which suffers from increased competition in a shrinking segment, but the brand is set to launch its first crossover later this year. BAIC’s issues have been discussed here before: to confusing line-up of sub-brands, too complicated distribution network, subpar quality after growing too fast in recent years, etc.

Wey is the best selling new brand (<12 months), followed by Bisu now that its third nameplate T5 (#167) has become a hit for the brand. That pushes down Hanteng with still just a single model, followed by SWM Motor which added a second model in recent months. Borgward has already celebrated its first anniversary, but is behind all these brands with a loss of 40% on its second month of sales, despite doubling its line-up to two nameplates.

China brands ranking August 2017

Please note these figures are for locally produced models only, they exclude imported cars, which make up only a small portion of sales in China.

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About Bart Demandt

Bart is a 36-year old Dutchman who's always had a thing for cars, the automotive industry and statistics. He’s combined these passions by writing about them on CarSalesBase.com. His daily driver is an Alfa Romeo GT 3.2 V6 which he just can't seem to say goodbye to thanks to the mesmerizing exhaust note.
You can find all his articles Here.